Shares in online womenswear brand Sosandar closed down just over 5% this evening at 30.3p despite a positive trading update issued this morning which showed third quarter revenue of £1.6m – a performance that was slightly ahead of expectations.
The AIM-listed business said its revenues had soared by 219% on the same period in the prior year and indeed was greater than the entire revenue generated in 2017 (the business was established in 2016 and gained a listing the following year via reverse manoeuvre into a cash shell company).
Sosandar said the surge in revenue came from strong repeat orders along with continued new customer acquisition. Its customer database increased during the period by 209% to nearly 100,000 while conversion rate increased 129bps to 3.47%.
Repeat orders increased by 527% to more than 20,000 (total number of orders hit 35,183) while the average order value was up 10% at £105.58. The business said it had managed to increase its gross margin to 53.3% and decrease its return rate to 49%.
“We are pleased to be reporting another period of substantial growth over the key trading months to 31 December driven by strong full price sales and high sell through rates, combined with a successful seasonal sale at the end of period. We are delighted by the engagement we are building with our customers, evidenced by the increase in visits, orders and especially conversion and margins which are already comparing favourably with established businesses,” said co-founders and joint CEOs Ali Hall and Julie Lavington in a statement.
“We are selling well across existing categories such as partywear and leather, and also seeing a promising performance in new areas such as loungewear and accessories. Combined with a substantial increase in repeat orders and a significant uplift in conversion rates to 3.47%, this highlights the underlying quality of our products and the sizeable growth opportunities we have with the Sosandar brand,” they added.